Sympathy for the Devil

[ConfusedEasily]

Graham, it's utterly exhausting discussing anything with you. You speak in riddles and constantly change your story. It's clear to me you are just here to sell Big Group. Anything other than that you dismiss; fair enough you believe in your resolution strategy - but I am far from convinced. I thought WTT could still arrange settlement for me, but I'll be going elsewhere.

In fairness, BG has been pretty consistent. It's always been about settlement either via their strategy or CLSO2. Graham doesn't need to sell his strategy as, I believe, it is now closed.

I'm in the unfortunate position of seeing several members of my direct reports caught up in this, one will lose her home and job (HMRC insolvency post-APNs). Two are off sick and a final one has arranged CLSO2 (through WTT). We have a few more we suspect may be in trouble and we are considering supporting them with expertise internally.

Personally, I find the level of ingratitude towards people who are trying to give advice quite staggering. We are all in a situation born out of a lack of due-diligence of finding ourselves in an uncomfortable position. Graham, ILikeTax etc. are telling you things you find uncomfortable so I would suggest that you engage an accountant and a Lawyer and ask their opinion. 'You pays your money - you takes your choice' - and if you don't like what they say, you can pay another accountant and another lawyer until you get the answer you like.

[phil@pmtc]

Phil

Appreciate your advice here. I was in the IoM scheme, received APNs last year, and paid them - I read the APNs as begin unavoidable, and it was a case of pay up now or face fines/interest/penalties - and so I paid them. I was unaware they could be opposed (or that there were any grounds to oppose them), and was also unaware until last week that the Limitation Act might apply to the NIC element of the APNs. Until the APNs were paid, I had always opposed payment of the tax and NI.

Is it too late to ask for a refund of the NIC payments, given they were out-of-time? I think unfortunately I know the answer but would appreciate an expert's advice.

Thanks.

Don’t wish to get up hopes but actually this may be ok dependent on details. I’m out at min recovering from 5 a side. Pm me your number and can have a chat in morning (all advice on this matter free of charge as only a call)

[phileds]

Too late?

Phil

Appreciate your advice here. I was in the IoM scheme, received APNs last year, and paid them - I read the APNs as begin unavoidable, and it was a case of pay up now or face fines/interest/penalties - and so I paid them. I was unaware they could be opposed (or that there were any grounds to oppose them), and was also unaware until last week that the Limitation Act might apply to the NIC element of the APNs. Until the APNs were paid, I had always opposed payment of the tax and NI.

Is it too late to ask for a refund of the NIC payments, given they were out-of-time? I think unfortunately I know the answer but would appreciate an expert's advice.

Thanks.

[ChimpMaster]

The maximum your could get tax relief on would be 3x £40,000 plus £10,000. That assumes you already have a registered pension scheme, haven't made any pension contributions in 2018/19 or in the three years before, and that your annual allowance is not tapered in the earlier years.

<snip>If your employer is still around -- not pertinent to me</snip>

<snip>If you have a big pension pot already -- not pertinent to me</snip

A registered pension scheme - could that be one that my permie employer paid into 15 years ago but since then I haven't paid into? (it has around £40k invested in funds)

So on £130k I guess the relief would be 45% if one falls into the highest tax rate?

I think the numbers are getting too big for me anyway but it's interesting to see how much one might save by making a £130k pension contribution in 2019.

[Iliketax]

My reasoning behind it is that is it any different from salary sacrifice? So i wouldnt call it tax avoidance, just tax planning.

Doesn't matter what you call it. The legislation is designed to stop you getting money back without paying tax. But if you put your cards face up on the table and HMRC say fine, fill your boots.

FYI HMRC have already commented here: https://www.gov.uk/hmrc-internal-man...anual/eim47050

[jes107]

You might want to ask an independent tax adviser about para 4(1) here: Finance (No. 2) Act 2017

It basically says that if you don't pay tax on the money you "ask them to divert" then the repayment of the loan won't count as a repayment. So the April 2019 loan charge still applies to that old loan. But that would be less than half your problem because if the promoter arranged a new loan for you to repay the original loan then there may well be a new disguised remuneration charge on the new loan. So the tax rates get quite high, quite quickly (even ignoring GAAR).

Yeah, may even just direct my question to HMRC. My reasoning behind it is that is it any different from salary sacrifice? So i wouldnt call it tax avoidance, just tax planning.

[Iliketax]

interesting

As previously warned, my pensions knowledge is poor but if I read the numbers correctly for a 2019 income of £300k (random figure btw):

Income: £300000
Pension: £160000 - you pay £128000 and government adds £32000 i.e. 20%

The maximum your could get tax relief on would be 3x £40,000 plus £10,000. That assumes you already have a registered pension scheme, haven't made any pension contributions in 2018/19 or in the three years before, and that your annual allowance is not tapered in the earlier years.

If your employer is still around (so that PAYE/NIC is due) then you will need to fund the tax on full loan charge plus the net pension contribution (so you will need to fund the extra tax relief that you will eventually get, until you've submitted your tax return and HMRC get around to refunding you). Also, you don't get relief for the employee's NIC (or self-employed NIC if that is relevant). This isn't relevant if your employer has been wound up.

You will also be at risk of changing pension relief rules. You can partly deal with that by getting some of the loans waived (formally) this tax year and making contributions this year. But take independent advice.

If you have a big pension pot already, you can get yourself into the 55% tax regime which makes it less attractive. If you are close or over 55 then you can get some of the cash back tax free (PCLS). But you'd have to make sure that the PCLS didn't fund your contributions (google pensions recycling). If you will be a higher / additional rate taxpayer on retirement then it is less attractive too.

[Iliketax]

If the trust loan provider is still around would it be possible to somehow repay them (bank loans etc) and then ask them to divert the money into a pension scheme. (Risky i know)

You might want to ask an independent tax adviser about para 4(1) here: Finance (No. 2) Act 2017

It basically says that if you don't pay tax on the money you "ask them to divert" then the repayment of the loan won't count as a repayment. So the April 2019 loan charge still applies to that old loan. But that would be less than half your problem because if the promoter arranged a new loan for you to repay the original loan then there may well be a new disguised remuneration charge on the new loan. So the tax rates get quite high, quite quickly (even ignoring GAAR).

[ChimpMaster]

Stick £250000 income and £160000 pension contribution into this.

Pension tax relief calculator | Hargreaves Lansdown

interesting

As previously warned, my pensions knowledge is poor but if I read the numbers correctly for a 2019 income of £300k (random figure btw):

Income: £300000
Pension: £160000 - you pay £128000 and government adds £32000 i.e. 20%

Then on tax return you can reclaim £39500 tax relief.

Total tax+NI (according to IR35calc) is £130300.

So you need to have enough funds to pay £128000 into the pension, and then £90800 tax (£130300 - £39500).

That's a hefty £218800 ! But you would have reduced your tax bill by £39500.

[jes107]

Don't even think about doing this.

I hear you. The provider are AML/ICS (who i still use as my limited company accountants) and i was just thinking if it could be done in lots of small amounts, say 1-2k a month. Putting aside how risky it is; would this satisfy HMRC that the loan was repaid?